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Michael Stueart
USA
26 Posts |
 Posted - 01/01/2003 : 00:42:15
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I am new and it is fuzzy to me. Is carpet and padding always covered as Personal Property and ACV? I know some of you will be thinking " What a Dumb Question" but I would like to know.
Michael |
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katadj
USA
315 Posts |
Posted - 01/01/2003 : 00:58:20
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It all depends on the POLICY, we cannot stress this enough. The NFIP treats carpet and padding as an ACV item, ALWAYS.
Other policies treat it as ACV or RCV depending on the policy. It is NOT always personal property. If it is installed with a tack strip, (NOT LOOSE LAID) it is mostly treated as structure, (i.e. Building, Coverage "A"), however each policy in each state may address these specifically.
Read the policy before you write it, or say anything................. |
Edited by - katadj on 01/01/2003 00:59:53 |
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Newt
USA
657 Posts |
Posted - 01/01/2003 : 10:18:07
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Michael, the only dumb question is the one you don't have the answer to and never ask.
I got one RD, in depreciating the carpet would you, or is it customery to also depreciate the padding. It takes a beating as much or more so than the carpet. I have never ran across this in any topics covered here. I know different carriers would have a different way to handle this, but I was wondering about the norm.
Most carpets that are considered personal property normally don't have padding and are considered rugs.
Mobile homes and homes with decking do not use the tack bars normally. The carpet is stapled directly to the decking. I would consider any carpet fastened by what ever means to be part of the "A" claim, even if it was glued down.
Am I way out?
If we always follow the letter of the policy, instead of estimating, we could sometimes, like in this case do a dis-service to the customer and the carrier. What I am trying to get across is sometimes there are rare cases where a judgement call is required by the adjuster.
These are not answers but oppinions, when I start my apprenticeship I would like for my oppinions to be in the right ballpark and not in left field. Above all we need to make our goofups here instead of the field.
Happy New Year!!!! |
Edited by - Newt on 01/01/2003 16:48:24 |
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katadj
USA
315 Posts |
Posted - 01/01/2003 : 10:59:37
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Padding is normally treated the same as Carpet. In the eyes of the NFIP. And always @ ACV. Same with Appliances.
Both Padding and carpet, can/will/should/may be depreceiated in other policies and paid as ACV initially, with RD collected after the work is done, IF the proper coverage is in place. "The policy rules"
To reiterate a previous poster, " The only dumb question, is the one NOT asked" |
Edited by - katadj on 01/01/2003 11:01:05 |
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RJ
32 Posts |
Posted - 01/01/2003 : 13:39:24
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Michael Stueart:
Your Question on carpet & pad is a good question because this one item alone demonstrates just how complex the adjusting issues are for an adjuster in determining coverages and how to apply policy provisions. Unfortunately, there are probably as many answers to your question as there are carriers writing coverage.
So, to simplify what I am taking about I will limit my response to just one policy. This will be the Standard Flood Insurance Policy enacted by congress under the National Flood Insurance Program (NFIP).
The easy part of your question is payment based on RC or AC and if the depreciation is recoverable or not. First of all carpet and pad are always AC and the depreciation is always non-recoverable. This provision is the exact same thing in all Three policies (Dwelling Form Policy, General Property Form Policy and the Replacement Cost Building Association Policy (RCBAP)).
Now to the hard part of your question. Is the carpet and pad paid for under the building of contents portion of the claim? The simple answer is that it can be paid in either the building or contents portion of the claim. The difficult answer is the process an adjuster must go through to make the determination of which coverage he can include the carpet & pad for payment.
As an example of what I am talking about is this:
Carpet and pad destroyed by flood and is installed on an unfinished subfloor.
Case # 1:
1. Insured is the home owner
2. Insured carries both building and contents coverage
The carpet & pad is paid under the building portion of his claim.
Case # 2:
1. Insured is a tenant
2. Insured only carries contents coverage
The carpet & pad is paid under the Contents portion of his claim. The reason is due to the 10% allowance for insured’s Betterments & Improvements afforded under the flood policy for contents coverage. The problem with this is as with any tenant/landlord situation is that the ownership of the carpet & pad must be proven to have been installed at the expense and is the sole responsibility of the tenant. This will create additional work for the adjuster, however, if you don’t take care of obtaining proper documentation this part of the claim in all likely hood will be denied.
Now that you see what I am taking about be well aware that there are many different circumstances that will determine if carpet is paid for in building or contents. Not only the method of installation or coverage will affect how and under what coverage to include payment the policy in effect and if the insured is the building owner or a tenant will also determine under which coverage, building or contents, the carpet will be paid under.
No Michael, your question is not a dumb question. It goes write to the hart of our profession. Our profession is one of the most complex occupations anyone could become involved in. It is impossible for anyone to know all of the answers. Because just when you think you have everything under control someone somewhere will throw you a curve ball. I have been in this business since 1989, and believe me I am still learning. So keep on asking questions that is a big part of the learning process. As you learn more your questions will become more in depth and increasing difficult for anyone to answer. That is why this site is one of our most valuable tools. You have access to thousands of individuals within this profession. Each with his or her own unique experiences & knowledge. As a sum total of all of this knowledge and experience (by the way you will not find anywhere else) any question that you may think of will find someone that can answer your question. Well a good question sometimes sets off an explosion of answers leading to a lot of debate (sometimes heated). In my small way I hope I have helped you.
RJ
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